IBC: receives court approval to extend exclusivity

Kansas City / MO. (ibc) Interstate Bakeries Corporation (IBC) announces that it received Bankruptcy Court approval to extend the exclusive period to November 08 to file a plan of reorganization and to January 07 to solicit acceptances and to exit the bread market in Southern California by October 20, as planned.

«We have been here three years and a few days on this case and another 30 days won´t hurt a whole lot», Bankruptcy Judge Jerry Venters says. «I hope everybody will lay their weapons down and give this thing a shot».

Attorneys for IBC, which filed for Chapter 11 protection in September 2004, had wanted to extend the deadline to January 15 to develop a plan for exiting bankruptcy. But they asked for a shorter period now after being unable to reach an agreement with the company´s largest union, the Teamsters, over health and welfare concessions and a proposed revamping of the company´s distribution system.

They said they would use the time reviewing options that would maximize value for IBC´s creditors, including a sale of the company as a whole or in parts. The Teamsters asked Venters to reject the company´s request for an extension, saying three years was more than enough time to develop a plan and he should allow other players a chance to propose their own plans for the company´s future.

Frederick Perillo, an attorney for the Teamsters, said he was not optimistic about an agreement and that Venters should remove conditions requiring potential investors to sign confidentiality agreements preventing them from negotiating directly with the union.

In court filings, Interstate Bakeries said it had received interest from a number of parties willing to invest in the company once it got out of bankruptcy. But those agreements hinged on the company being able to get its top two unions to agree to a number of concessions.

IBC last week was able to reach a tentative agreement with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which is currently having its roughly 9.000 members vote on the new contract. But IBC has not been able to come to terms with the Teamsters, which represents about 10.000 employees. The union has objected to the concessions, as well as the company´s plan to redesign its product distribution system (press release).

About: Interstate Bakeries Corporation (IBC) is one of the United States´ largest commercial bakers and distributors of fresh-baked bread and sweet goods, sold under various brand names. IBC is headquartered in Kansas City, Missouri. IBC filed for bankruptcy protection on September 22, 2004, citing liquidity issues resulting from declining sales, a high fixed-cost structure, excess industry capacity, rising employee healthcare and pension costs, and higher costs for ingredients and energy. The company continues to operate its business in the ordinary course as a debtor-in-possession.